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How can revealed preference analysis help us learn about a consumer's preferences without knowing the consumer's utility function?
Explain why a good with a positive price elasticity of demand must violate the law of demand.
Sketch a graph of a perfectly inelastic demand curve. What will happen to the equilibrium quantity of Maris baseball cards bought and sold?
Derive the inverse demand curve corresponding to this demand curve. What is the price elasticity of demand at P = 50?
In 2011, Ps =10, Y = 40, and PA = 100. How much steel will be demanded in 2011? What is the price elasticity of demand, given market conditions in 2011?
If R = 2 and T = 10, calculate the equilibrium price and quantity of golf balls. Calculate the price elasticity of demand and the price elasticity of supply.
How would you expect an increase in the price of gasoline to shift the demand for transportation by taxi cabs?
Find a linear demand curve that fits this information and draw it on a clearly labeled graph.
What does this tell you about the sensitivity of demand to price for this good? Discuss why this is the case.
Find linear demand and supply curves that are consistent with this information.
For each month find the equilibrium price and quantity. Illustrate your answer with a graph. Illustrate the equilibrium prices and quantities on the graph.
Plot the utility and marginal utility functions on two separate graphs. Show algebraically and graphically value of H at which he would stop consuming hot dogs.
Carlos has a utility function that depends on the number of musicals and the number of operas seen. Why does Carlos believe that more is better for each good?
On a graph with grams of yogurt on the vertical axis and grams of ice cream on the horizontal axis. Show the directions of increasing utility
The utility that Julie receives by consuming food F and clothing C is given. What is the slope at the basket with 4 units of food and 3 units of clothing?
Draw a typical indifference curve (it need not be exactly to scale, but it needs to reflect accurately whether there is a diminishing MRSx,y).
Do you have enough information to determine Annie's marginal rate of substitution of food for shelter? If so, what is it? If not, why not?
Why will the consumer always choose a basket on the budget line? How will a change in income affect the location of the budget line?
At an optimal interior basket, why must the slope of the budget line be equal to the slope of the indifference curve?
Illustrate graphically how the exogenous event described will contribute to a higher price of corn in the U.S. market.
For each of the following scenarios, illustrate graphically how the exogenous event contributed to a rise or a decline in the price of oil in 2008.
What is the objective function for this problem? Which of the variables (Q, E, L, PE, and PL) are exogenous? Which are endogenous? Explain.
How would the equilibrium price of aluminum in 2004 compare to the equilibrium price in 2003?
How would the equilibrium price of ethanol motor fuel in the first half of 2008 compare to the price in 2007?
How would an increase in the price of gasoline abroad affect the equilibrium price of gasoline in the United States?